Everyone knows that business schools use GMAT scores to shortlist their MBA candidates. Check out the average GMAT scores for the top MBA programs in the world. But beyond that, do the scores have any other purpose? Not many people know that the scores are also used by MBA recruiters.
Yes, you heard it right. Top companies in management consulting, investment banking, and financial services, which are dream employment destinations for MBAs, are among recruiters that take a look at GMAT scores of job applicants before deciding whether to call them for interviews.
Some people have even retaken GMAT after appearing for the test and got good enough scores to take them to the best business schools. Why do they bother? They want to present better GMAT scores in their job applications so they would be shortlisted by top recruiters who use the scores to decide whom to call in for an interview.
A leading business magazine reported some time ago that for at least some companies in management consulting, investment banking, and financial services, GMAT scores are a reliable yardstick of a candidate’s academic aptitude.
Top companies are known to ask applicants to mention their GMAT scores in their applications. Some companies won’t even glance through the applications of candidates who have not mentioned their scores. Even if such a candidate is lucky enough to be called because of their other merits, the question about their GMAT score is bound to come up at the interview.
Apart from interviews conducted at an employer’s site, recruiters make GMAT scores a key factor in shortlisting candidates they talks to at campus interviews. The scores are also used for selecting candidates for internships.
Some other companies don’t think GMAT scores would work as an indicator of whether a candidate has potential and should be considered.
The recruitment head of a top management consultancy firm has been quoted as saying that his company tells its recruiters routinely not to focus on GMAT scores, as the scores “don’t capture the type of problem-solving we do in our job.”
How many companies use the GMAT score in their recruitment process?
Instead of guessing the answer to that question, we reached out to the Graduate Management Admission Council (GMAC) – the company that owns the GMAT. Here’s what we found out.
From the Corporate Recruiters Survey 2018, GMAC asked a question, “Does your company use candidates’ GMAT scores as a part of the hiring decision?”
The response was as follows:
- 6% say they use GMAT score
- 21% say they sometimes use GMAT score
- 72% say they do not use GMAT score
This shows that the GMAT score plays a role (in varying degrees) in the hiring process of a sizeable number of companies.
What your score says about you
Why do companies look at GMAT scores? GMAC devised the GMAT to predict success in business schools. Those same skills in quantitative analysis, problem-solving, data interpretation, and effective communication are important in business life, too. The scores tell them about candidates’ abilities and skills, tested in a standardized process.
A candidate’s performance in each section of the GMAT tells companies about some specific ability that she is equipped with. The quantitative section, in which numerical problems have to be solved and quantitative figures studied, tells them about the candidate’s quantitative reasoning aptitude and logical interpretation skills. A good score indicates to the recruiter that she can work with numbers and with financial reports, essential in many organizations where MBAs work.
A high score in the verbal section, which includes reading comprehension, sentence correction, and critical reasoning, indicates verbal skills, and shows that the candidate has critical thinking skills. It helps management consultancies to hire candidates with critical reasoning skills as they have to work with research reports.
A good score in integrated reasoning, where tables have to be interpreted and figures with data made sense of, shows that the candidate can use her analytical skills to use data and solve difficult business problems. The analytical writing assessment score shows that the candidate can understand critique and offer viewpoints on topics. This would be helpful when the candidate has to make strong presentations to clients and win them over.
Not a rank list
It is not as if companies use GMAT scores to prepare a rank list of candidates who should be called in for interviews. They want to only invite candidates who cross a threshold: it may be 700-720 at the top companies.
One cannot say that the higher a candidate’s GMAT score, the greater his chances of being called for an interview. It is only that companies see it apt to call candidates who have already, in some measure, proved that they have the skills necessary by scoring in GMAT.
However, companies approach the GMAT score differently and have different thresholds. It is always a good idea for an applicant to find out whether the company she is applying to uses GMAT scores and whether it has a threshold.
Quants have the edge
Some firms look at scores from not only GMAT but also other standardized tests such as GRE and SAT. Some of them mainly focus on the quant section score. If a candidate has only scored 700, but the math score is high, then the chances of this applicant getting an interview invite is high, particularly if the other portions of the application are strong. The GMAT score is just one factor in the decision of whether to call a candidate or not.
Future on-job performance
Companies, especially those that have quant-intensive work, believe that math scores are more indicative of future performance on the job than verbal scores. They tend to invite candidates with a high enough GMAT math section score and a high enough GPA. Of course, these attributes should come along with demonstrated leadership qualities.
However, companies are aware that high scores from standardized tests don’t necessarily correlate to high performance on the job.
The law of diminishing returns applies. One popular belief is that beyond a higher a GPA of 3.5, efficiency does not increase with higher scores. It is the same with GMAT/GRE/SAT scores.
A policy to go by GMAT scores for shortlisting candidates is a big boon for recruiters as they can eliminate some applications without even reading them, saving themselves time and energy. They can also reject applications that haven’t mentioned GMAT scores when this had been specifically requested.
There is of course, the danger that they may miss one or two great potential applicants who have scored less than the GMAT threshold score. But they don’t seem to worry too much about this, given the advantages that this shortlisting policy brings them.
It has been pointed out that only 10 percent of candidates score above 700 globally, and a candidate who fall short by a few marks may be just as good, or even better in some cases than those who have crossed the threshold.
‘Retake the test’
Candidates tend to forget about their GMAT scores once they have got admission to their choice b-school. However, an expert in GMAT says it might be helpful to remember that the scores continue to be relevant. So relevant that a candidate with a GMAT score below 720 would do well to retake the test particularly if she aims to apply for competitive positions in management consulting.
This makes sense. The global average GMAT test score may be around 556, and 68 percent may score between 430 and 670, but the average score of incoming students at top schools is increasing as more candidates with higher GMAT scores apply to these schools.
Recruiters likely don’t care whether an applicant got her GMAT score before or after admission to a b-school, so it is wise to take the test to improve the score whenever possible.
Apart from MBA admissions and recruitment, high GMAT scores also help a candidate who is planning to go for Master’s in Finance or Management, as schools ask for GMAT scores.
Some firms don’t look at GMAT scores in isolation. They see it as an effective counterweight to grade inflation besides as a filter mechanism to help decide whom to call for interviews.
They can’t always use GPA, since schools have different policies of their own and there may be no uniformity in how the GPAs of their students are arrived at. However, there is no such risk if GMAT scores, which is a global standardized measuring tool, is used.
Alternative to GPA
Some recruiters are keen on seeing the GMAT scores of applicants, particularly if the job position is in financial planning, analysis, risk management, and equity departments. They also ask to see the GPA. Many job postings for positions mention that GPA is required, “unless your school has a non-disclosure policy.”
But if your MBA or Master’s school has a grade non-disclosure policy, the interviewer would want to know your GMAT score, which some recruiters feel could be a good alternative to assess your academic performance, as there would be uniformity in grading.
For salary, too
Not only an invite for an interview, your GMAT score may also decide your starting salary, if some researchers are to be believed. A formula that has been arrived at that assumes that every 10 GMAT points bring an additional $3,000 a year to a candidate. For example, a candidate with a GMAT test score of 700 is likely to earn $30,000 more each year than one whose score is 600. But the formula does not take into account job performance and advancement, industries, or job positions.
True or false, this much is true about GMAT scores and salaries: if top GMAT scorers go to the top schools, and big companies recruit from these schools, it follows that the top GMAT scorers would have the biggest salaries. This is not so much integrated reasoning as just common sense.
In any case, in a highly competitive job market, a good GMAT score is an added advantage for any candidate. Often, a good score comes in handy to get a foot in the door. As someone said, a high GMAT score didn’t hurt anyone.
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References: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 | Image credit: GMAC